QUESTION 14

1. A company purchases supplies on account, what is the effect on the accounting equation?

   		Assets decrease; equity increases
   		Assets decrease; equity decreases
   		Liabilities decrease; equity decreases
   		Liabilities increase; equity increases
   		Liabilities increase; assets increase

4 points

QUESTION 15

1. Unearned revenues are:

   		Revenues that have been earned and received in cash
   		Revenues that have been earned but not yet collected in cash
   		Liabilities created when a customer pays in advance for products or services before the revenue is earned
   		Recorded as an asset in the accounting records
   		Increases to retained earnings

4 points

QUESTION 16

1. A debit is:

   		An increase in an account
   		The right-hand side of a T-account
   		A decrease in an account
   		The left-hand side of a T-account
   		An increase to a liability account

4 points

QUESTION 17

1. Acme Company had equity of $55,000 at the end of the current year. During the year the company had a $2,000 net loss and investments by owners in exchange for stock of $7,000. Compute equity as of the beginning of the year.

   		$5,000
   		$46,000
   		$50,000
   		$52,000
   		$64,000

4 points

QUESTION 18

1. If Beginning Retained Earnings was $184,300, the company distributed $46,000 in dividends and Ending Retained Earnings was $345,000, what was the net income for the period?

   		$154,700
   		$206,700
   		$114,700
   		$575,300
   		$160,700

4 points

QUESTION 19

1. In which of the following situations would the trial balance not balance?

   		A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash
   		The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and credit to Accounts Payable
   		A $50 cash receipt for the performance of a service was not recorded at all
   		The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200
   		The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750

4 points

QUESTION 20

1. Which of the following is the appropriate journal entry if a company performs a service and is paid immediately?

   		Debit to Cash, Debit to Revenue
   		Debit to Cash, Credit to Revenue
   		Debit to Accounts Receivable, Credit to Cash
   		Debit to Revenue, Credit to Accounts Receivable
   		Debit to Accounts Receivable, Credit to Revenue

4 points

QUESTION 21

1. Indicate whether a debit or credit entry would be made to record the following changes in each account. a. To decrease Cash. b. To increase Common Stock. c. To decrease Accounts Payable. d. To increase Salaries Expense. e. To decrease Supplies. f. To increase Revenue. g. To decrease Accounts Receivable. h. To increase Retained Earnings.

    i. To increase unearned revenue j. To increase dividends

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10 points

QUESTION 22

1. Using the trial balance below: complete the income statement, the statement of retained earnings and a balance sheet.

   Johnny Dollar's Body Shop
   Trial Balance
   December 31, 2020
   Cash	6500
   Accounts receivable	475
   Body shop supplies	2500
   Office supples	600
   Body shop equipment	35200
   Accounts payable			1500
   Common stock			10000
   Retained earnings			11775
   Dividends	36000
   Revenue earned			95000
   Body shop supplies expense	3425
   Office supplies expense	775
   Rent expense	6000
   Utilities expense	4800
   Wages expense	22000
   	118275		118275

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